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Would Steve Jobs Or Ted Turner Succeed In These Big Data Obsessed Times?

Spurred by the data analytics revolution, corporations aim to collect and analyze reams of data. This data becomes the basis for modeling the future, which in turn can define growth strategies. This is what is meant by predictive and prescriptive analytics.

I wonder what the “predictive” and “prescriptive” aspect will do to corporate creativity. I define corporate creativity as creating a completely new product or service, seemingly “out of thin air.” I am not thinking here about incremental improvements to existing products or services. I do realize that “corporate” and “creativity” seldom go in one sentence. I think they should.

At this stage, much of the data analytics action in corporations is centered around customer behavior, trying to figure out how, why, where and what customers buy, and attempting to understand all the nuances associated with buying decisions. Such understanding of their customers can lead companies to segmenting them by buying patterns and adjusting their offerings accordingly.

As an example, to understand how to tailor its offerings to different customer segments Pep Boys analyzed its database of 24 million customers. Based on the customer types, the company is now adding different store formats and enhancing digital operations, as described in Setting the Course for Growth: CEO Perspectives, a recent report from KPMG and Forbes Insights.

This is smart. This is how analytics is prescriptive. It can also lead to incremental innovation as customers can give companies their feedback on the quality of the services or products they are getting, or what else they might find useful. Analyzing and acting on such input from customers leads to new innovative solutions.

But what about the products and services that customers do not know they want? The type of products devised by genius brains a la Steve Jobs or Ted Turner?

There is no data about what does not yet exist, so data analytics cannot help us here. Would data analytics ever lead us to a 24 hour news channel, as devised by Ted Turner? Would we have the AppleApple typeface?

In his New York Times article, Creativity vs. Quants, Timothy Egan describes “how Steve Jobs came up with the groundbreaking font selection when Apple designed the Mac: He had taken a class in the lost art of calligraphy and found it “beautiful, historical, artistically subtle in a way that science can’t capture.” Ten years later, it paid off when Apple ushered in a typeface renaissance.”

I do not see how the choice of the typeface could have been arrived at through data analytics. Some business decisions are coincidental or rely on making connections between seemingly disparate worlds (e.g. calligraphy and technology.)

Of course predictability — not suspense or originality — is the basis for business earnings. Welcome to America where every (McDonalds’s) hamburger tastes the same. We stay at brand name hotels or buy brand name clothes because we know what to expect. Even in the innovative technology field, predictability pays off. We know that iPhone 5 will be followed iPhone 6 etc. etc.

Predictability does not mean stagnation. 93% U.S. corporations are at some stage of a transformation, according to Business Transformation and the Corporate Agenda from Forbes Insights and KPMG. The smartest among them realize that their environments, reliant on predictable earnings, armored with data analysts and used to their existing operating models, are not be the best environments for change.

Some, such as AT&T, have created divisions to deal with creative change. AT&T started AT&T Foundry innovation centers to accelerate the process of bringing new products and services to market, and it created a new crowdsourcing program, called The Innovation Pipeline (TIP) for employees to bring their ideas for new products and services to an online site where the best ideas would be built upon, funded and brought to market.

It’s also crucial to realize that creativity cannot be judged by the same metrics as the rest of the business. For most of the business operations the crux of success lies in not making mistakes. Creativity is about making mistakes. Failing fast can help cut the losses. Data analytics may be used to curb some of the effects of these mistakes, but cannot be used to try prevent making them. Otherwise we are going to get stuck on optimizing, instead of moving ahead.

Summing up: Corporations need to be careful about how and when they apply predictive and prescriptive analytics to make sure they do not squeeze the flow of creative juices too much. We need more things that we don’t know — can’t imagine — we need.

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